This article is a great summary of a major innovation which, despite some false starts and ongoing issues, overall has been a success. It has genuinely become part of the fabric of Australian life and it is hard to find a better national health system anywhere on the globe! This fact is something we should all celebrate!
Mind the gap: At 40, Medicare feels the pain of age as patients pay more
Universal health care was a proud Labor achievement. At 40, Medicare is in better shape than its US and UK peers, but there are cracks in the ageing edifice.
By Deborah Snow
January 28, 2024
In 2016, three years before his death, Bob Hawke was growing frailer. But the Labor titan was able to perform one last service for his party.
Wielding every ounce of his still considerable authority, the then 86-year-old starred in a series of prime-time ads warning Australians that the Liberal Party was out to privatise and destroy that most cherished of Labor’s reforms, Medicare.
Hawke’s warnings carried particular weight – he was, after all, the prime minister who’d launched Medicare three decades earlier, in 1984.
The 2016 “mediscare” campaign, as it was soon dubbed, had tenuous foundations. Labor weaponised a Coalition plan to investigate outsourcing the scheme’s back office payment functions – hardly a wholesale dismantling. Even so, the campaign was stunningly successful, nearly carrying then opposition leader Bill Shorten into the Lodge.
In 1993, then-prime minister Paul Keating, had made similar mincemeat out of then opposition leader John Hewson, when Hewson proposed dismantling key elements of Medicare as part of his much-maligned Fightback! package.
“Universal health insurance was really the defining fault line in Australian politics for 25 years at least, from the time that Gough Whitlam first proposed it [in the ’70s] until the time that the Liberal Party raised the white flag after the 1993 election,” federal Health Minister Mark Butler recalls.
“Establishing Medicare and firmly implanting it as part of Australia’s social fabric was a long, long fight for Labor – and one we are very proud of.”
As Medicare approaches its 40th anniversary on February 1, the scheme’s political potency endures, much to the astonishment of Dr Neal Blewett, the health minister under Hawke who oversaw its introduction.
“We had no expectation [at the time] that it would survive so long,” the now 90-year-old recalls. “We hoped it would, but we didn’t expect it given the Liberals were so clearly out to destroy it if they got back into power. Today I look back with a sense of amazement that it’s still there as the basic health system of this country.”
Dr Rachel David, the CEO of Private Healthcare Australia, describes Medicare as “by far the most popular brand that any political party in Australia has ever associated itself with, more popular than the age pension” – a telling observation from a body that represents the private health funds, once among the most vociferous opponents of the scheme.
To mark the 40th anniversary, Prime Minister Anthony Albanese and Butler will use the resumption of parliament on February 6 to open an exhibition on the scheme’s history, which will tour halls and libraries around the country.
Yet, there are cracks in the ageing edifice – and they are starting to widen, raising fears it’s increasingly becoming a two-tier scheme, especially for those who do not have concessional status.
AMA federal president Professor Steve Robson likens it to a “cherished family home that’s in need of a reno; I think it’s still liveable, but it’s been neglected”.
John Menadue, who was Gough Whitlam’s chief aide and later head of his department, believes “the ALP has been living off the legacy of Medicare for 40 years – and after 40 years, everything needs change and reform”.
Menadue was privy to the earliest discussions inside Labor that eventually led to the first iteration of Medicare, dubbed Medibank, in 1974-75, developed by then social security minister Bill Hayden. Medibank replaced a hodgepodge of private insurance arrangements and a ragged government safety net which had left many Australians without medical cover.
(Despite the yearnings of some in the party, there were constitutional obstacles against setting up a British-style nationalised health service here.)
But Medibank didn’t survive the ousting of the Whitlam government by Malcolm Fraser in 1975, and by the time Hawke came to power, the Fraser government had largely dismantled it. Some 2 million Australians were again living without protection against the potentially devastating financial consequences of ill health.
Hawke was in a tearing hurry to get the new Medicare scheme up and running after his election in 1983, Blewett recalls. “He wanted it within a year because it was part of the accord with the unions – in return for wage restraint he’d promised them the social wage, and the most important feature of the social wage for unions at that stage was Medicare.”
The 1984 scheme, rising phoenix-like from the ashes of its 1975 predecessor, built on the key features of the original: universal, compulsory, funded by a taxpayer levy, with a single payer (the federal government). Doctors were offered incentives to charge standard fees across the system and minimise out-of-pocket costs to patients by “bulk-billing” (also known as direct billing) – that is, charging government directly for consultations, and accepting that as full payment, rather than leaving patients to seek refunds.
Not only would Medicare offer the fairest form of health cover, its designers hoped, but it would be cheaper too. While medicos would not be obliged to keep their fees to the level the government was prepared to reimburse (the so-called “scheduled fee”), it was thought many would do so because of its administrative simplicity.
An important aspect of Medicare, the PHA’s David points out, was that it allowed the private sector to find a complementary place in the overall scheme, particularly on private hospital cover and a range of ancillary services.
And the public hospital systems benefited from the extra funds the Hawke government poured in under new agreements with the states.
The speed with which Medicare was set up in 1984 was breathtaking, recalls Bill Bowtell, then the chief aide to Blewett.
“From September 1983 there was a huge campaign to enrol people and give them a Medicare card – we had over 90 per cent of the population enrolled by the following February. It was a remarkable achievement.”
Today the opposition’s health spokesperson, Anne Ruston, says the Coalition has a “steadfast commitment to ensure the ongoing sustainability” of the scheme, while the original hostility of the doctors’ groups to the scheme has long since evaporated.
The AMA’s Robson says, “Medicare is embedded in the national psyche; the current generation of medical practitioners have grown up with it and have a sense that it has delivered for Australia in a way that we have not seen in countries like the UK and US.”
Yet for many Australians, Medicare is no longer delivering on the rosy promise of the early days, when Hawke promised that “all are guaranteed, as a basic right, protection against the financial impact of essential medical and hospital treatment”.
Cost pressures and a six-year freeze on Medicare scheduled benefits prior to 2019 have eroded the willingness or ability of GP practices to bulk-bill regular (that is non-concessional) patients, millions of whom are struggling with their own cost-of-living pressures.
The Australian Patients Association reports that only 10 per cent of the 9000 people it surveyed recently said their regular GP was fully bulk billing. Nearly two-thirds reported shelling out between $21 and $60 out of their own pockets, and 73 per cent said the cost of living, combined with rising gap fees, was affecting their health care decisions.
In November, a start-up called Cleanbill asked around 6300 GP practices around the country how many were bulk-billing every patient who walked through their door. Only 24.2 per cent said they were.
The Royal Australian College of General Practitioners reported that the proportion of GPs bulk-billing all their patients halved from 24 per cent in 2022 to 12 per cent last year.
And while the most recent federal health department data records that 76.5 per cent of GP services were still being bulk-billed, that’s not the same as the proportion of patients always bulk-billed by their GPs. Nationally, the department put that figure at 51.6 per cent in 2022-23, down sharply from 64.3 per cent the previous year.
Meanwhile, co-payments for basic scans are also rising. Only 67.9 per cent of ultrasounds are now fully covered by Medicare, down 10 per cent in three years.
The Consumers Health Forum’s head of advocacy, Melissa Le Mesurier, says: “We are certainly hearing from some consumers that out-of-pocket costs mean they are either delaying or not accessing that initial health care, which is a concern for them and for the system as whole because it just pushes the problem down the road where it gets more complex and more expensive.”
Private Healthcare Australia says it has evidence that some doctors are also still charging fees while bulk-billing, which is forbidden by law (if a medico bulk-bills for a service, they should not also be charging a patient a fee for that service). It recently had an anonymous letter from an office administrator in Victoria, alleging that every one of the 25 surgeons in that practice were charging patients as well as bulk-billing them, or lodging “no gap” claims with private health funds despite gap payments being sought.
“A lot of patients don’t realise its illegal, some doctors don’t realise its illegal,” the PHA’s David warns. “It’s one of those things that’s not measured or policed, and I think it’s one of the many aspects of Medicare that the department needs to get on top of. They can’t just rely on the stats that come through Services Australia and the card-swipe machines. It’s a consumer issue that really needs to be investigated.” (The department says it doesn’t use the terminology “illegal” because the issue has yet to be tested in the courts.)
Butler acknowledges that bulk-billing “has been in sharp decline whatever measurement you use”. He says the challenges facing Medicare stem not just from years of near-frozen rebates (the Gillard government put a temporary freeze on them in 2013, and the Coalition extended that for several years) but also the changes over time in the pattern of illness.
Once most GP visits were of an “episodic” nature, say an infection, or a broken bone. Today, there’s a far heavier burden of chronic disease – diabetes, obesity and mental health most prominently – driven by lifestyle and an ageing population.
“Medicare has not been redesigned to reflect that change; it’s not well set up to deliver wraparound, multidisciplinary continuous care,” Butler concedes.
Recently, he’s launched three key measures aimed at stemming the slide in bulk-billing rates.
The first has been the establishment of 58 “urgent care” clinics across the country, all of which will eventually operate for extended hours seven days a week. Primarily they’re intended to take pressure off nearby hospital emergency rooms, but they’ll also bulk-bill anyone who walks in. However, they are only financially viable because of the generous extra subsidies they receive from the federal government.
Both the AMA and the Royal College of Australian General Practitioners have given the urgent care clinics a cool reception, fearing they will drain staffing and resources from existing general practices, and introduce more inequality in the health system (those for whom the clinics are geographically accessible versus those for whom they are not).
Butler’s second measure has been to treble the financial incentives doctors receive from government to bulk-bill concessional patients – pensioners, health care cardholders, and under 16-year-olds – with an extra loading for those in remote and regional areas. While this will support the 11 million Australians in those categories, it won’t help people like the 21-year-old apprentice who recently walked through the door of AMA NSW president Michael Bonning’s practice. The apprentice was earning $28,000 a year but did not fall into any concessional group. (Bonning has chosen to bulk-bill the young man anyway.)
Butler is hoping the new incentives will arrest a further slide in bulk-billing for the most vulnerable. “It was becoming clear to me that there were a whole lot of practices right at the end of their tolerance and, if we didn’t do something, there would be an avalanche [of practices abandoning bulk-billing],” he tells the Herald.
Ruston says she has “little confidence” the extra incentives will arrest the trend, but doctors’ groups have welcomed the enhanced bulk-billing incentives as a significant injection of funds, albeit not enough to compensate for what they say is years of government under-investment in the scheme.
Butler’s third measure is a foray into teams-based care for people with multiple or chronic conditions. Launched under the banner of MyMedicare, and still in its infancy, the scheme will encourage high-needs patients to register with a single practice that can then access better funding for the delivery of multidisciplinary care.
More text and pictures here:
https://www.smh.com.au/politics/federal/mind-the-gap-at-40-medicare-feels-the-pain-of-age-as-patients-pay-more-20240120-p5eytd.html
There is little doubt that Medicare is still a work in progress and far from perfect. Its systems are slow showing their age and probably could do with a total re-vamp!
It seems to me what is needed now is a reshaping of the way services are delivered with a strengthening of the link between patients and practices which are supported to deliver as fuller range of services as possible.
In some areas acute care clinics and their private equivalents and doing a pretty good job of reducing hospital demand and providing a level of care just above the basic GP capability.
The emergence of services specifically focused on selling expensive medications to more well-off patients on perhaps less specific clinical need is worrying at present but may, or may not, be a lasting trend.
Digital Health in the GP arena is well served with a number of software solutions well tailored to the needs of local GPs and delivering reasonable functionality for clinical info. recording, referrals, electronic prescribing, billing and so on.
The last decade has seen the emergence of useful analytic packages of practice performance and increasingly clinical outcomes etc.
The demand from Government for improved reporting has been a driver here!
No coverage of OZ Digital Health can ignore the central Medicare computing capability which processes billions of dollars week and supports some pretty useful analytics which sadly are not as widely shared as they should be!
These systems support on of the most cost-efficient disbursement systems globally as well as being a user of some pretty large IBM mainframes to cope with the huge transaction volumes.
The bottom line is that Medicare as we know it would simply not the possible without a range of very significant computing and technology grunt!
David.
